The following financial information is for Priscoll Company.

Additional information:
1. Inventory at the beginning of 2018 was $115,000.
2. Accounts receivable (net) at the beginning of 2018 were $86,000.
3. Total assets at the beginning of 2018 were $660,000.
4. No common stock transactions occurred during 2018 or 2019.
5. All sales were on account.
Instructions
(a) Indicate, by using ratios, the change in liquidity and profitability of Priscoll Company from 2018 to 2019.
(b) The following are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2019, and (2) as of December 31, 2020, after giving effect to the situation.

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PRISCOLL COMPANY Balance Sheets December 31 Assets Cash Debt investments (short-term) Accounts receivable Inventory Prepaid expenses Land Building and equipment (net,) Total assets 2019 70,000 55,000 104,000 230,000 25,000 130,000 260,000 $874,000 2018 $ 65,000 40,000 90,000 165,000 23,000 130,000 185,000 $698,000 Liabilities and Stockholders' Equity Notes payable Accounts payable Accrued liabilities Bonds payable, due 2022 Common stock, $10 par Retained earnings Total liabilities and stockholders' equity $170,000 65,000 40,000 250,000 200,000 149,000 $874,000 $120,000 52,000 40,000 170,000 200,000 116,000 $698,000 PRISCOLL COMPANY Income Statements For the Years Ended December 31 Sales revenue Cost of goods sold Gross prolit Operating expenses Net income 2019 $882,000 640,000 242,000 190,000 2018 $790,000 575,000 215,000 167,000 $48,000 32,000 Situation Ratio 1. 18,000 shares of common stock were Return on common stockholders' equity sold at par on July 1, 2020. Net income for 2020 was $54,000. 2. All of the notes payable were paid in Debt to assets ratio 2020. All other liabilities remained at their December 31, 2019, levels. At December 31, 2020, total assets were $900,000. 3. The market price of common stock was Price-earnings ratio $9 and $12 on December 31, 2019 and 2020, respectively. Net income for 2020 was $54,000.